CIMB-Standard Chartered completes USD financing rate swap

By ANIS FARHANAH MALEK
anisfarhanah@dagangnews.com

KUALA LUMPUR 17 Sept. - CIMB Bank Berhad (CIMB Bank) and Standard Chartered Bank Malaysia (Standard Chartered)  jointly announced today the completion of the first RM Kuala Lumpur Interbank Offer Rate (KLIBOR) - USD Secured Overnight Financing Rate (SOFR) cross currency basis swap transaction. 

The US$100 million trade is the first RM-USD cross currency transaction referencing the SOFR, which is the Risk Free Rate to succeed the USD London Interbank Offer Rate (LIBOR). 

Head of Financial Markets (ASEAN excluding Singapore) at Standard Chartered, Sylvia Wong said, the institution had previously concluded the first CNY cross currency swap referencing the CNY repo rate and the USD SOFR as well as the first SGD SORA - USD SOFR cross currency swap in the region. 

“We are extremely pleased to extend Standard Chartered’s global commitment towards working with financial markets participants and clients in navigating the global benchmark reforms. With this RM transaction, being another first RM cross currency swap referencing USD SOFR, Standard Chartered continues our pioneering efforts in the Asian cross-currency derivatives markets. 

“This underscores Standard Chartered’s dedication and enthusiasm towards the development of Malaysian financial markets by working closely with our clients, industry bodies and regulators. A liquid interest rate derivatives market that adopts new globally accepted reference rates is crucial to allow Malaysian institutions to hedge effectively and efficiently,” said Wong in a statement today. 

The conclusion of this transaction coincides with the Malaysian Financial Markets event to be held on tomorrow, the Malaysia IBOR Transition. 

Organised by the Asia Securities Industry and Financial Markets Association (ASIFMA), in collaboration with the Financial Markets Association of Malaysia (FMAM), the event will include a keynote address by Bank Negara Malaysia (BNM) Assistant Governor, Aznan Abdul Aziz. 

Meantime, Group Treasurer of CIMB Group, Chu Kok Wei said, as one of the largest financial market participants in the local currency space in Malaysia and ASEAN, CIMB is delighted to reinforce their readiness in handling the IBOR transition in key markets in ASEAN. 

“In addition to this landmark transaction, CIMB Bank had also concluded our first local interbank USD SOFR interest rates swap that is centrally cleared through the LCH. Furthermore, our subsidiary CIMB Thai Bank had also transacted its maiden Thailand Overnight Repurchase Rate (THB THOR) Overnight Index Swap (OIS) and medium term interest rate swap trades. 

“Global benchmark reforms have impacted various ASEAN local currency markets either directly or indirectly. Divergence in the development paths and the distinctive nuances in each market poses unique challenges to each local financial market. 

“With our extensive ASEAN footprint and our deep involvement in the development of the respective local financial markets, CIMB is well positioned to contribute towards the local market development agenda,” Kok Wei added. - DagangNews.com